Reference no: EM132726908
Question - Raiders Corp. has the following capital structure at the beginning of 2020:
Preferred shares, $3, no par value, non-cumulative, 20,000 shares authorized, 6,000 shares issued and outstanding $ 300,000
Common shares, no par value, 60,000 shares authorized, 40,000 shares issued and outstanding 510,000
Total contributed capital 810,000
Retained earnings 340,000
Total shareholders' equity $1,150,000
Net income for the year is $225,000.
Instructions - Record the following transactions which occurred in the year ending December 31,2020. Show all calculations.
a) There are no dividends in arrears. A total cash dividend of $ 90,000 was declared. The preferred shares are participating to a maximum of 10%. Record dividends payable to common and preferred shares in separate accounts.
b) A 10% common stock dividend was declared and distributed. The market value of the common shares are $16 per share.
c) Incorporating all the above information and transactions, present the revised shareholders' equity as of December 31, 2020.